On Thursday, Bernstein, a division of SocGen Group, maintained an Outperform rating on Walmart Inc. (NYSE: NYSE:WMT) shares, expressing confidence in the retail giant's potential to capitalize on its scale and enhance value for customers, particularly in the e-commerce sector.
With a market capitalization of $762 billion and impressive year-to-date returns of 82%, Walmart has demonstrated strong market performance. The firm underscored Walmart's near break-even status in U.S. e-commerce based on a subsidized contribution basis and forecasted a possible breakeven within the next one to two years. According to InvestingPro analysis, the stock appears to be trading above its Fair Value, with technical indicators suggesting overbought conditions.
The analyst highlighted Walmart's strides in automating e-commerce fulfillment, scaling last-mile delivery efficiencies, and expanding high-margin alternative revenue streams as key drivers for the anticipated e-commerce profitability.
These improvements are expected to support Walmart's overall earnings before interest and taxes (EBIT) growth, which is projected to surpass sales growth due to the company's investments in omni-channel capabilities. The company's robust revenue of $674 billion and moderate debt levels support its expansion strategy.
Bernstein set a price target (PT) of $102 for Walmart shares, anchored on projected earnings per share (EPS) of $3.10 and a price-to-earnings (P/E) multiple of 32.8x for the fifth to eighth fiscal quarters. Currently trading at a P/E ratio of 39x, the stock commands a premium valuation. This target reflects the firm's positive outlook on Walmart's financial performance and growth trajectory in the near future.
Walmart has been focusing on integrating its online and physical retail operations to create a more seamless shopping experience for customers, an approach that seems to be yielding tangible results according to Bernstein's analysis.
The company's efforts to refine its e-commerce business model are seen as a significant factor in its ability to compete effectively in the rapidly evolving retail landscape. For deeper insights into Walmart's valuation and growth metrics, InvestingPro subscribers can access comprehensive research reports and 18 additional ProTips about the company's performance and outlook.
The endorsement from Bernstein comes at a time when many retailers are grappling with the challenges of digital transformation and the need to meet changing consumer behaviors. Walmart's progress in these areas appears to set it apart, positioning it favorably in the eyes of investors and market analysts, as evidenced by its strong financial health score from InvestingPro.
In other recent news, Walmart Inc. continues to demonstrate robust performance, with notable developments including a positive third-quarter earnings report, strategic acquisitions, and recognition from various analyst firms.
The retail giant's third-quarter consolidated revenues increased by 5.5%, and global eCommerce sales rose by 27%. Walmart's acquisition of consumer electronics company VIZIO for $2.3 billion, a move aimed at enhancing its advertising business, Walmart Connect, has also drawn attention.
Analyst firms including KeyBanc Capital Markets, RBC Capital Markets, and Piper Sandler have maintained positive ratings on Walmart, adjusting their price targets accordingly. KeyBanc raised the price target on Walmart shares to $100.00 while keeping an Overweight rating.
RBC Capital Markets increased Walmart's price target from $96.00 to $105.00, maintaining an Outperform rating, while Piper Sandler confirmed its Overweight rating on Walmart, maintaining a price target of $93.00.
Walmart and Amazon.com (NASDAQ:AMZN) reported record-breaking sales during the holiday season, outperforming competitors like Target (NYSE:TGT) and Best Buy (NYSE:BBY). Moreover, Kathryn McLay, Walmart's Executive Vice President, President, and CEO of Walmart International, established a prearranged stock trading plan, selling 4,000 shares of Walmart common stock monthly from March 2025 through December 2025. These are the latest developments in the retail sector.
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